Pavel Podvig has a good column over at the Bulletin of the Atomic Scientists. The article, “Behind Russia and Iran’s Nuclear Reactor Dispute” addresses changes in Russia’s position towards Iran, which I blogged about last week, and argues that Russia should in fact complete Bushehr construction and ship fuel.

Last week, Russia reportedly threatened to deliver fuel to Bushehr only if Iran stopped its uranium enrichment program. Podvig makes a good point in assessing the magnitude of the policy change; something is happening and it is significant, but probably not a radical turn.

From some Russian experts, I have heard additional views on a few points Podvig raises, particularly on Russia’s commercial benefits of cooperation with Iran, and on delaying fuel delivery to Bushehr. Podvig writes:

There are other powerful institutions in Russia that would like to keep the current Russian-Iranian cooperation going, even if this means confronting the West (think of arms sales, for example).”

While I frequently hear mention of pro-Iranian lobby or interest groups in the Russian government, the arms trade may be a more mixed example. Several experts, including Ruslan Pukhov and Konstantin Makienko at the Centre for Analysis of Strategies and Technologies (CAST, which focus on conventional arms trade issues) told me that, in comparison to Russia’s arms trade elsewhere in the world, the current contracts and possibilities for future sales with Iran are rather small. (See also Wade Boese’s similar comment quoted in a CFR brief.)

In addition, I have heard the comment that, considering how much a hassle Bushehr has been, Rosatom is not all that interested in building more reactors in Iran. This assessment is hard to verify, but given resent overtures to India, I would not be surprised if Rosatom set their sites on other partners, which would not only be paying on time in the right currency, but would also be more acceptable partners internationally. When Rosatom and India’s Atomic Energy Department signed a cooperation memorandum in January 2007, Putin highlighted India a good actor on nonproliferation: “Russia supports the initiatives for lifting NSG restrictions from India as this country has perfect reputation in terms of compliance with nonproliferation requirements.”

Podvig also argues that if Russia further delays fuel delivery to Bushehr, this would damage its reputation as a fuel supplier:

The paradox of the current situation is that as much as it is in the international community’s best interest for Iran to suspend its enrichment program, termination of the Bushehr project or further delays with fuel shipments would be the wrong decision. Doing so would undermine any confidence in future arrangements of guaranteed fuel supply for nuclear power reactors. Whatever elaborate schemes the international community comes up with to provide reliable access to nuclear fuel—fuel banks, IAEA oversight, etc.—they may as well not exist if they’re not insulated from political pressure.

I disagree. First, schemes for international fuel supply or fuel banks are tied to the recipient country forgoing domestic enrichment. It appears that this is what Russia has done with its ultimatum. The approach with Iran would support a yet to be established fuel supply system; if a country moves ahead with its own enrichment program, then it is not entitled to guaranteed fuel from suppliers.

Secondly, a reputation could of course be even more dramatically ruined, but Russia’s reputation as reliable energy supplier is on rocky ground anyway. Russia’s cut off of gas to Ukraine in January 2006 and of oil through Belarus in January 2007 has partners hesitating in relying too much on Russia in the future. Regardless of whose fault these dispute really were, Russia clearly has the capacity and the will to cut off very significant energy flows in times of disagreement.

Specifically on Iran, we can also look at the Bushehr situation as example of energy cooperation which has continually been used for political pressures. Commenting in Nezavisemaya Gazeta earlier this month, Rose Gottemoeller said that Russian policy very carefully uses work on Bushehr as a lever in diplomatic relations between the two countries. Delivering fuel now is not going to save Russia from being perceived as using Bushehr, its nuclear fuel supplies, or even its other energy resources, for political purposes.